In the pet nutrition industry, veterinarians typically recommend, endorse and sell specialty pet nutrition products, either directly or through suppliers. This results in a highly controlled supply and distribution chain, whose maintenance ensures that the pet owner receive the specific and authentic product required by their pet.
Veterinarians maintain control over the conventional supply chain by stocking the requisite products, and overseeing their distribution and sale. While this seems practical, it requires the veterinarians to maintain large storage spaces capable for storing perishable products. They must also spend significant time running a store type operation. Many veterinarians lack such space and the desire to run a store type operation; however, with high profit margins from retail sales of such specialty products, most veterinarians want to sell and distribute these products as retailers. Also, being a retailer of specialty products generates good will for the veterinarian's practice.
As the consumer base continues to grow and move farther away from veterinarians, it is not always feasible for these consumers to travel to obtain their specialty nutrition products for their pets. Moreover, a pet owner, who travels to their veterinarian, depends on that particular veterinarian's inventory being adequately stocked with the desired specialty products in the desired amounts.
Other industries maintain control over their supply chains, and in particular, allow only authorized retailers to sell the product. For example, U.S. Patent Publication US 2003/0050857 A1 discloses an electronic commerce marketing system, where a consumer places an electronic order with a supplier over the supplier's web site. The supplier then directs the order to a field service representative or salesperson, who sells the ordered product to the consumer for the retail price. The field service representative purchases the product at any time from the supplier, and carries the product in his inventory, regardless of whether the product has been ordered by a consumer.
Additionally, professional activities, such as retail sales by certain retailers, are legally regulated. This is especially true for health professionals, and in particular, licensed animal health professionals. For example, California prohibits veterinarians from receiving commissions from any referrals they make, including referrals of products. As a result, veterinarians must be extremely careful when offering products for sale to consumers.